You may have heard that the health care reform law (the Affordable Care Act, or ACA) is "cutting Medicare." That's not true. Let me explain.

The Affordable Care Act is reining in overpayments to private

Medicare Advantage(MA) plans by bringing MA payments closer to what traditional Medicare spends on a given beneficiary. The insurance industry and some legislators suggest that these overpayment reductions are actually harmful "cuts" to Medicare.

Private Medicare Advantage plans simply should not receive higher pay than traditional Medicare. It's not fiscally sound or fair to taxpayers to do so. Plus, despite these extra payments, beneficiaries in private MA plans, especially those with health concerns, often receive less coverage and have fewer care options than they would in traditional Medicare.

Adjustments to Medicare Advantage payment rates should continue, to ensure more equality between private MA plans and traditional Medicare. According to

research at George Washington University, in 2009 per-enrollee payments were, on average, 13% higher for MA plans than for traditional Medicare; a total of $12.7 billion in overpayments in 2009 alone. The ACA rate changes will bring that difference down to 1% by 2017. Even then, private MA plans will be paid more than comparable care would cost in traditional Medicare.

Fortunately, Medicare’s overall costs have grown more slowly than expected in recent years. Thus payment increases to MA plans should also slow, to reflect actual costs. Private insurers that choose to offer Medicare plans should not be insulated from market forces that are reducing the rate of growth of Medicare and health care costs.

So now you know. And if you hear that "Obamacare is gutting and cutting Medicare," you can explain that's not true.

Observation Status Not Fixed, and May Be Worse with New "2-Midnight" Rule

New rules that became effective last year did not change the requirement that a patient spend at least three consecutive days in a hospital as an inpatient in order to qualify for Medicare coverage of a subsequent stay in a skilled nursing facility (SNF). The rules are just a tool for doctors to apply in making inpatient admission decisions. If the doctor believes a patient will require at least two midnights in the hospital, that patient should be admitted to inpatient status, but patients still need three midnights as inpatients to qualify for Medicare coverage in a SNF. Now, however,some studieshave shown that use of thenew rule might actually increase hospitals use of Observation Status.

New Federal Poverty Levels Affect Eligibility for Many Federal Programs

Reducing wasteful overpayments to private Medicare Advantage plans until they are paid at the same rate as traditional Medicare is not "cutting Medicare," and actually helps strengthen the program for the future.Read more.

We Still Need Hospice Stories!

The Center for Medicare Advocacy is interested in hearing from Medicare beneficiaries (or their families) who sought services like medication, therapy or medical equipment from their hospiceprovider but were denied Medicare coverage and hospice services. In particular, we are interested in hearing from people who meet the following criteria:

1. Their doctor prescribed or recommended a medication, service or item;2. A request was made to the hospice, which refused to furnish the medication, item, or service, believing it would not be Medicare-covered;3. The patient or family paid out-of-pocket for the denied medication, item, or service; and4. The patient or family asked the hospice or Medicare about how to appeal the denial, but no information was provided.

The last two criteria (#3 and #4) would be helpful, but are not essential.

Congress has until March 31st to finalize and pass a permanent fix to the flawed Sustainable Growth Rate Medicare physician payment formula. Advocates remain concerned that a permanent fix include important “extender” provisions that usually ride along with annual SGR legislation, including the Qualified Individual (QI) Program and the therapy caps exceptions process. Advocates are also concerned that fixing SGR, at a cost of roughly $117 billion dollars, not be paid for by shifting costs onto beneficiaries. Read more about SGR.

Medicare Part C and D Notice of Proposed Rule Making Open for Comment

CMS recently shared proposed regulations for the Medicare prescription drug program (Part D) and the Medicare managed care program (Part C) for public comment. Several of the proposals represent important steps in improving the program and protecting beneficiaries, but one provision, which would scale back protected drug classes, is of serious concern. Advocates are urged to comment by March 7th on the proposed regulation. The National Senior Citizens Law Center has posted directions on how to comment here. The Center for Medicare Advocacy and several other organizations sent a joint lettersupporting certain portions of the rule while challenging the protected drug class provisions.

CMS Releases Proposed Payment Rates for Private Medicare Plans

As mentioned twice above, this information was preceded by a hue and cry from the insurance industry in an effort to influence so-called "cuts." However, the proposed rate includes no new "cuts" – just implementation of current law. The proposed payment rate continues to move MA plans payment closer to traditional Medicare, a fair and worthwhile policy goal thatbenefits all Medicare beneficiaries.

Center to Host 1st Annual National Voices of Medicare Summit and Senator Jay Rockefeller Lecture
Our own experts will be joined in lectures and panel discussions by luminaries including Senator Jay Rockefeller, Medicare Director Jonathan Blum, Former Medicare/Medicaid Director Bruce Vladeck, and Members of the National Long-Term Care Commission. Read More.